Abhinandan Shanthinath Saligrama Vs DCIT (ITAT Bangalore)
Updated Return During Scrutiny Invalid; ITAT Grants Relief Only for Limited Verification
In this case, the assessee’s return was selected for scrutiny due to a high refund claim, but he failed to respond to notices, leading to a best judgment assessment under section 144. The AO made additions including ₹18.55 lakh as unexplained bank credits under section 69A and disallowed excess salary and Chapter VI-A deductions.
Although the assessee later filed an updated return admitting higher income and correcting wrongful claims (HRA, LTC, deductions), the ITAT held that such updated return is invalid if filed during pending assessment proceedings, as per the proviso to section 139(8A). Accordingly, additions relating to incorrect salary and deduction claims were confirmed.
However, the Tribunal granted partial relief by:
- Remanding the issue of ₹1.5 lakh deduction under section 80C for verification.
- Directing the AO to allow credit of taxes paid under section 140B.
- Remanding the major addition of ₹18.55 lakh (bank credits) back to the AO, giving the assessee one more opportunity to explain that the funds belonged to his wife’s business.
The appeal was thus partly allowed for statistical purposes, emphasizing that non-compliance can be fatal, but genuine explanations deserve one final opportunity.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
